The history of credit cards The history of credit cards The history of credit cards By Ben Woolsey and Emily Starbuck Gerson Share this Story: Tweet As far back as the late 1800s, consumers and merchants exchanged goods through the concept of credit, using credit coins and charge plates as currency. It wasn't until about half a century ago that plastic payments as we know them today became a way of life. Early beginnings In the early 1900s, oil companies and department stories issued their own proprietary cards, according to Stan Sienkiewicz, in a paper for the Philadelphia Federal Reserve entitled " Credit Cards and Payment Efficiency ." Such cards were accepted only at the business that issued the card and in limited locations. While modern credit cards are mainly used for convenience, these predecessor cards were developed as a means of creating customer loyalty and improving customer service, Sienkiewicz says. The first bank card, named "Charg-It," was introduced in 1946 by John Biggins, a banker in Brooklyn, according to MasterCard . When a customer used it for a purchase, the bill was forwarded to Biggins' bank. The bank reimbursed the merchant and obtained payment from the customer.

The catches: Purchases could only be made locally, and Charg-It cardholders had to have an account at Biggins' bank. In 1951, the first bank credit card appeared in New York's Franklin National Bank for loan customers. It also could be used only by the bank's account holders. The Diners Club Card was the next step in credit cards. According to a representative from Diners Club, the story began in 1949 when a man named Frank McNamara had a business dinner in New York's Major's Cabin Grill. When the bill arrived, Frank realized he'd forgotten his wallet. He managed to find his way out of the pickle, but he decided there should be an alternative to cash. McNamara and his partner, Ralph Schneider, returned to Major's Cabin Grill in February of 1950 and paid the bill with a small, cardboard card. Coined the Diners Club Card and used mainly for travel and entertainment purposes, it claims the title of the first credit card in widespread use. Plastic debuts By 1951, there were 20,000 Diners Club cardholders. A decade later, the card was replaced with plastic.

Diners Club Card purchases were made on credit, but it was technically a charge card, meaning the bill had to be paid in full at the end of each month. According to its archivist, American Express formed in 1850. It specialized in deliveries as a competitor to the U.S. Postal Service, money orders (1882) and traveler's checks, which the company invented in 1891. The company discussed creating a travel charge card as early as 1946, but it was the launch of the rival Diners Club card that put things in motion. In 1958 the company emerged into the credit card industry with its own pruduct, a purple charge card for travel and entertainment expenses. In 1959, American Express introduced the first card made of plastic (previous cards were made of cardboard or celluloid). American Express soon introduced local currency credit cards in other countries. About 1 million cards were being used at about 85,000 establishements within the first five years, both in and out of the U.S. In the 1990s, the company expanded into an all-purpose card.

American Express, or Amex as it often is called, is about to celebrate its 50th credit card anniversary. Closed-loop system The Diners Club and American Express cards "functioned in what is known as a 'closed-loop' system, made up of the consumer, the merchant and the issuer of the card," Sienkiewicz writes. "In this structure, the issuer both authorizes and handles all aspects of the transaction and settles directly with both the consumer and the merchant." In 1959, the option of maintaining a revolving balance was introduced, according to MasterCard. This meant cardholders no longer had to pay off their full bills at the end of each cycle. While this carried the risk of accumulating finance charges, it gave customers greater flexibility in managing their money. Bank card associations "The general-purpose credit card was born in 1966, when the Bank of America established the BankAmerica Service Corporation that franchised the BankAmericard brand (later to be known as Visa ) to banks nationwide," Sienkiewicz writes. In 1966, a national credit card system was formed when a group of credit-issuing banks joined together and created the InterBank Card Association, according to MasterCard.

The ICA is now known as MasterCard Worldwide, though it was temporarily known as MasterCharge. This organization competes directly with a similar Visa program. "The new bank card associations were different from their predecessors in that an 'open-loop' system was now created, requiring interbank cooperation and funds transfers," Sienkiewicz says. Visa and MasterCard still maintain "open-loop" systems, whereas American Express, Diners Club and Discover Card remain "closed-loop." Visa and MasterCard's organizations both issue credit cards through member banks and set and maintain the rules for processing. They are both run by board members who are mostly high-level executives from their member banking organizations. As the bank card industry grew, banks interested in issuing cards became members of either the Visa association or MasterCard association. Their members shared card program costs, making the bank card program available to even small financial institutions. Later, changes to the association bylaws allowed banks to belong to both associations and issue both types of cards to their customers. Credit card processing evolves As credit card processing became more complicated, outside service companies began to sell processing services to Visa and MasterCard association members.

This reduced the cost of programs for banks to issue cards, pay merchants and settle accounts with cardholders, thus allowing greater expansion of the payments industry. Visa and MasterCard developed rules and standardized procedures for handling the bank card paper flow in order to reduce fraud and misuse of cards. The two associations also created international processing systems to handle the exchange of money and information and established an arbitration procedure to settle disputes between members. Other issuers join the party Although American Express was among the first companies to issue a charge card, it wasn't until 1987 that it issued a credit card allowing customers to pay over time rather than at the end of every month. Its original business model focused on the travel and entertainment charges made by business people, which involved significant revenue from merchants and annual membership fees from customers. While these products are still in its tool chest, the company has developed numerous no-annual fee credit cards offering low introductory rates and reward programs, similar to as traditional bank cards. Another relatively recent entry into the card business is Discover Card, originally part of the Sears Corporation. According to Discover, its first card was unveiled at the 1986 Super Bowl.

Discover Card Services sought to create a new brand with its own merchant network, and the company has been successful at developing merchant acceptance. A 2004 antitrust court ruling against Visa and MasterCard -- initiated by the U.S. governement and the Department of Justice -- changed the exclusive relationship that Visa and MasterCard enjoyed with banks. It allows banks and other card issuers to provide customers with American Express or Discover cards, in addition to a Visa or MasterCard. The future The ongoing switch to EMV compliant chip cards is the biggest change in the traditional credit card. It involves sending hundreds of millions of chip-bearing cards to consumers, and new chip-reading card terminals being installed at merchants across the country. However, it still relies on a a physical card, While the plastic card has been the standard for a half century, recent developments show alternative forms of payment rising to prominence, including online services such as PayPal, credit card keyfobs, cellphone apps and payment chips implanted into other devices. But with the sheer volume of cards in use around America, the "card" in "credit card" is likely to stick around for several years to come. ADVERTISEMENT Join the discussion We encourage an active and insightful conversation among our users.

Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused. If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below. The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered. Three most recent Innovations, features, new products stories: Visa USA | Our Business | History of Visa Pioneering payments from day one Visa is at the center of a cashless revolution more than 55 years in the making.

History of Visa Our journey Visa’s journey begins in 1958, the year that Bank of America launched the first consumer credit card program for middle-class consumers and small to medium-sized merchants in the U.S. It didn’t take long for the company to grow—the company expanded internationally in 1974, and introduced the debit card in 1975. In 2007, regional businesses around the world were merged to form Visa Inc and, in 2008, the company went public in one of the largest IPOs in history. In 2016, Visa completed the acquisition of Visa Europe. Today, Visa operates in more than 200 countries and territories with products and services available on any device – cards, laptops, tablets and mobile devices. We continue to evolve, but our focus remains the same—to be the best way to pay and be paid, for everyone, everywhere. Milestones Bank of America launches BankAmericard, the first card with a ”revolving credit” feature. 1976 BankAmericard becomes Visa—a name that sounds the same in all languages. 2007 Visa forms a global corporation, while Visa Europe remains member-owned.

Timeline 1958: A cashless revolution 1958 Bank of America launches BankAmericard, the first general-purpose consumer credit card in the form of a paper card with a $300 limit. 1970: Cashless incorporated 1970 National BankAmericard incorporates in Delaware as National BankAmericard Inc., led by founder, visionary and CEO Dee Hock. 1973: The precursor to VisaNet 1973 National BankAmericard launches the first electronic authorization system, followed by an electronic clearing and settlement system. 1974: Going global The International Bankcard Company (IBANCO) forms to administer the BankAmericard program nationally. 1975: Debit debut The first debit card is launched. 1976: The birth of Visa 1976 BankAmericard becomes Visa, a simple name that sounds the same in every language, identified by a blue and gold flag. 1979: Travel with convenience and confidence 1979 The first Visa Travelers Cheques are issued in four currencies.

1983: Cash around the clock 1983 Visa launches an automated teller machine (ATM) network, providing 24-hour “anytime, anywhere” cash around the world. 1986: Everywhere you want to be 1986 A new ad campaign herald’s Visa’s evolution from a travel and business tool to a card for everyday use. 1986: What’s your currency? 1986 Visa develops multiple-currency clearing and settlement in 21 currencies. 1988: An Olympic Year 1988 Visa sponsors its first Olympic Games in Seoul, South Korea, and the Olympic Winter Games in Calgary, Alberta. 1989: Link to the future 1989 Visa adds electronic signature capability with the acquisition of Interlink. 1993: Fighting Fraud 1993 Visa is the first to apply state-of-the-art neutral network technologies to payments aiming to reduce card fraud. 1995: Debit goes mainstream 1995 Visa check card debuts and Visa co-creates EMV, an industry chip card specification that ensures interoperability between all chip-enabled cards and terminals.

1996: Financial training for the masses 1996 Visa’s first financial literacy program launches. It’s now in 20+ countries and has helped millions of people manage their money. 1997: Twelve months, twelve zeroes 1997 Visa’s total payments volume reaches US $1 trillion, a major milestone for the industry. 2000: One billion cards 2000 Visa reaches 1 billion issued cards and launches the Zero Liability policy, which protects cardholders from liability for fraudulent charges. 2004: Debit on the rise 2004 Visa’s total debit volume surpasses total global credit volume. 2004: Advanced authorization 2004 Visa introduces Advanced Authorization, which analyzes and assigns a risk score to every Visa transaction in real-time. 2006: Success quadrupled 2006 Visa’s total payments volume reaches US $4.4 trillion, surpassing the previous $1 trillion milestone set in 1997. 2007: Incorporating change Visa restructures, creating a new global corporation, Visa Inc.

2008: The mobile revolution 2008 Visa launches the Visa mobile platform to speed the adoption of mobile payments and value-added services. 2008: A very public statement 2008 The “V” ticker symbol appears on the N.Y. Stock Exchange as Visa becomes the largest initial public offering in U.S. history. 2009: More people Go with Visa 2009 Visa’s first global ad campaign celebrates how people everywhere need a better way to pay for the things they need and want. 2014: An easier way to pay online 2014 Visa Checkout offers shoppers an easy and secure way to pay online with just a few clicks—on any device. 2016: Visa Inc. and Visa Europe reunite as one global company The History of Credit Card Processing Merchant Account Guide The History of Credit Card Processing The issuing of non-cash for purchasing goods dates back as far as 1914. Western Union issued a metal plate or ï¿½cardï¿½ to their employees in lieu of a paycheck. This card was only good for purchases within the company owned stores.

While not very favorable by today's standards it was still the first ï¿½card.ï¿½ However the system was ï¿½closedï¿½. Meaning no one other than the company participated. The current bankcard system is considered an ï¿½openï¿½ system as many members can participate. The earliest form of a credit card was "Charg-It", a system of credit developed by John Biggins in 1946, which allowed customers to charge purchases at their local retail stores. The merchant then deposited the charges at Biggins' bank, and the bank reimbursed the merchant for the sale and collected payment from the customer. In 1950 Diners Club introduced the first Travel and Entertainment card and in essence was the real first credit card. The designation Travel and Entertainment (a.k.a. T&E) was due to the intended cardholder's use. Because it was designed to relieve a business man from having to take cash on the road and use for his travel and entertainment expenses. Diners Club is also considered the first acquirer, since they were the first to charge merchants a discount rate.

A discount rate is a percentage taken from each sale accepted as a fee to the issuer and acquirer. Later in 1951, the ï¿½Charg-itï¿½ system helped introduce the first ï¿½bankï¿½ credit card, which was circulated by Franklin National Bank in Long Island, NY. Once an application was submitted for credit worthiness a card was issued. Merchants copied information from the card onto a sales slip and called for an approval for each transaction over a specified limit (floor limit). The bank would then credit the merchants account for the sale minus a discount rate to cover the cost for providing the ï¿½loanï¿½. American Express entered the industry in 1958 and issued its first card. Marketed for travel and entertainment use too, it along with Diner's became known as T & E Cards. Also in 1958, Bank of America issued its first credit card, called the BankAmericard. The BankAmericard was issued and accepted only in California at the time. By 1959, other merchant account financial institutions had begun credit programs. Simultaneously, card issuers were offering the added services of revolving credit.

This gave the cardholder the choice to either pay off their balance or maintain a balance and pay a finance charge. The idea of the bankcard association began in 1960, when Bank of America started to license other banks to issue their BankAmericard and process BankAmericard transactions. This was primarily done to gain market share outside of California. Now, for the first time there were a group of banks issuing and acquiring the same credit card. These participating banks then exchanged credit card transaction information with one another, this was the beginning of what is now called ï¿½interchange.ï¿½ Even though other banks were now involved. In order to compete with BankAmericard's card licensing program, 14 banks met in Buffalo, NY, and formed Interbank Card Association (ICA) in 1966, a new association with the ability to exchange information on credit card transactions. Unlike other card organizations, a single entity did not dominate ICA and its members. Member committees were established to run the association. They established rules for authorization, clearing and settlement. They also handled marketing, security and legal aspects of running the organization. The following year, four California banks (known as the Western U.S.

States Bankcard Association) opened their memberships to other financial institutions in the United States. It was its own association with its own product name (brand) for its credit card ï¿½ it was called MasterCharge. WSBA had previously purchased the right to use this name from First National Bank of Louisville (currently known as National City Bank of Kentucky). WSBA then licensed Interbank Card Association to use the MasterCharge name and logo in 1968. Subsequent to being licensed to use the MasterCharge name and logo, ICA changed its name to MasterCharge. That same year, MasterCharge began what is now a huge global network by forming an association with Banco Nacional in Mexico. Later that year, they formed an alliance in Europe with Eurocard. The first Japanese members also joined that year. In 1970, Bank of America with its BankAmericard product, formed its own association. The association consisted of all the banks that were licensed to issue the BankAmericard. These banks now became member banks of this new association, called National BankAmericard, Inc. or NBI. A pivotal point in the credit card processing industry began in 1970 when Worthern Bank & Trust Co.

of Little Rock, AR, sued NBI. Worthern Bank was a member bank of the NBI association and was not able to also become a member of MasterCharge in order to offer that product to merchants and consumers that wanted it. That was due to the NBI rule for members to exclusively offer NBI's BankAmericard. Worthern Bank claimed that NBI's exclusive membership conditions placed Worthern Bank at competitive disadvantage. Worthern lost the first case and the initial appeal. However when Worthern Bank threatened NBI that it would take the case to the Supreme Court, NBI (in response to the U.S. Department of Justices' opinion and recommendation) changed its rules. Later on, NBI allowed its members to also be members of MasterCharge, and MasterCharge followed and adopted a similar policy. This policy would become known as ï¿½dualityï¿½ and forever changed the industry going forward. Also during the early 1970's the paper-based systems became cumbersome. Losses and tremendous overhead were two major problems. The need for automation pushed both associations to find a better way to handle transactions. So both National BankAmericard and MasterCharge introduced electronic payment systems in two stages.

In 1973 the authorization system was re-vamped. Authorization is the process of assuring there is adequate credit available on the card and capturing that ï¿½authorizedï¿½ amount to reduce the available credit. Previously this was based on a floor limit and a phone call was placed to a call center for any amount over the floor limit. National BankAmericard, Inc. (NBI) introduced their electronic on-line authorization system called Base I. MasterCharge introduced INAS for ï¿½on-lineï¿½ authorizations the same year. Then in 1974 NBI introduced Base II for on-line electronic clearing and settlement and MasterCharge introduced INET. Also in 1974, Bank of America's international licensees chartered an international6 company, IBANCO, to administer BankAmericard, Inc. outside the U.S. By the late 1970's ICA/MasterCharge too had members from as far as Africa and Australia. In 1976 the first bank becomes a dual member of both Associations, the result of the duality agreement six years earlier. Also in 1976, National BankAmericard, Inc. changed its name to Visa USA.

The IBANCO association also changed its name, and became Visa International. Then in 1977, MasterCharge changed its name to MasterCard International. This information has been provided by USMS. Credit Card Processing Articles The History of Visa Credit Cards The History of Visa Credit Cards You are here: Home / The History of Visa Credit Cards Today, Visa is a company with a market cap of over $162 billion, but when Visa was founded in 1958 no one even knew if the concept would make it off the ground… By the late 1950’s there had already been at least a dozen attempts to create a universal credit card (versus a store card) but all had failed miserably. Then came Joseph P. Williams, who was the V.P. for a division at Bank of America known as the Customer Services Research Group. He pitched the idea to the bank’s senior management team. The major selling point was that it could save the bank a tremendous amount of money. How? Because processing small checks for customers was very labor intensive and therefore inefficient and expensive in terms of salary and benefits. Instead, if customers could use a credit card to pay these small bills, it may very well save money.

So this credit card concept, originally known as BankAmericard, was green-lighted. The pilot consisted of 60,000 cards being mailed out to their banking customers – unsolicited – in Fresno, CA. These weren’t applications, but rather live, ready-to-use cards! Try not to think of the security and fraud implication of doing something like that in today’s world, but things were a bit different back in the idyllic 1950’s. By 1959, the program had been rolled out statewide. There were over 2 million cards in circulation and over 20,000 merchants were accepting them for payment, which is all the more impressive when you stop to think that all purchases and back end settlements were done using those carbon copy payment slips. The growing pains Despite the widespread use in the Golden State, the BankAmericard system could hardly be deemed a success at the time: 22% of accounts were delinquent, versus the expected 4% This new product did eventually give birth to a new phenomenon… credit card fraud . This almost led to the BankAmericard going to the chopping block.

But as fate would have it, Bank of America decided to keep the program and spent the early sixties reworking the system. California and beyond The BankAmericard system was originally intended to be used only in California. But in 1965, Bank of America decided to license the system to financial institutions elsewhere. Licensing was the only option because back then, multi-state banking was illegal. So of course, that meant BofA could only issue cards in California. To grow the user base, these other banks used the same trick of sending out cards unsolicited to customers. It worked so well that by 1970, over 100 million were in circulation across the country. But the United States wasn’t the only country participating. During the late 60’s, Bank of America had also licensed the system to a foreign banks in Canada, United Kingdom, and France. As you can probably guess, the BankAmericard name wouldn’t work in a foreign country, so those banks issued the cards under their own brand names.

BankAmericard becomes Visa Bank of America turned over control of the program in 1970 to the various financial institutions that were using it – creating an economic joint venture that would collectively own and operate it. The domestic operations were governed by a branch known as the National BankAmericard, or NBI. A separate branch was eventually established to handle the international licensing called IBANCO. This international arm, IBANCO, concluded in 1976 that it would be more beneficial to operate the entire BankAmericard network under a single name. The new name was especially important because many foreign countries were hesitant to use a card associated with Bank of America, even though their part in the operation by now was quite minimal. So In 1977 BankAmericard, Barclaycard (UK issuer), Carte Bleue (French issuer), Chargex (Canadian issuer) and the others chose “Visa” as the new universal name for the credit card. The company’s founder, Dee Hock, came up with the name. He stated it was a term that was understood in many languages and countries, and also stood for universal acceptance. For consistency, the blue, white, and gold flag was retained for the Visa logo.

Prior to that, each country used a different emblem. Visa as we know it today As we all know, credit cards continued to flourish during the 80’s and 90’s. Ironically, Visa’s history may have been different if it weren’t for some healthy competition from Discover. That’s because Discover pioneered the no annual fee concept when it launched in 1986. At the time, the concept of not charging an annual fee seemed preposterous and consumers had come to accept such fees as the cost of having a credit card. Furthermore, Discover was the first to offer cash back on purchases, which turned out to be quite a game-changer. To remain competitive, banks that issued Visa cards had to begrudgingly begin offering the same type of incentives or risk losing their market share. If the status quo of annual fees and no rewards had remained, would Visa’s historical growth continued unabated? It’s unlikely. By 2006, over 21,000 financial institutions participated in the Visa program. In October of that year it announced that most of the operations would be combined and turned into a publicly traded company.

Although this new entity didn’t include all the foreign components, it had a very successful IPO nonetheless. In 2008, it kicked off with the market valuing the company at over $50 billion. Visa is traded under the symbol “V” on the New York Stock Exchange (NYSE). As of January 2015, its market cap (company valuation) is in excess of $160 billion – that’s a massive gain in value since its IPO. What Visa does and doesn’t do Visa is branded today on both credit cards and debit cards. However, it’s important to realize that Visa issues none of the cards, nor do they extend any credit. Rather, it’s the affiliated financial institutions which are responsible for both. Visa generates its revenue from the (a) transaction fees on purchases, and (b) the licensing fees which financial institutions must pay to be part of the network. The re-birth of the BankAmericard name As an ode to history, Bank of America announced in 2007 that it would bring back the BankAmericard name. Today, there are several cards issued by BofA brandishing the BankAmericard name with its retro tri-color design.

Perhaps Joseph Williams, who passed in 2003, is looking down with a smile on his face. Which Visa cards are most popular? Currently, the following three are arguably the most popular on CreditCardForum: Credit Cards (History and Invention) Share By Mary Bellis Credit is a method of selling goods or services without the buyer having cash in hand. A credit card is only an automatic way of offering credit to a consumer. Today, every credit card carries an identifying number that speeds shopping transactions. Imagine what a credit purchase would be like without it, the sales person would have to record your identity, billing address, and terms of repayment. According to Encyclopedia Britannica, "the use of credit cards originated in the United States during the 1920s, when individual firms, such as oil companies and hotel chains, began issuing them to customers." However, references to credit cards have been made as far back as 1890 in Europe. Early credit cards involved sales directly between the merchant offering the credit and credit card, and that merchant's customer. Around 1938, companies started to accept each other's cards. Today, credit cards allow you to make purchases with countless third parties.

continue reading below our video 5 Best Places to Retire The Shape of Credit Cards Credit cards were not always been made of plastic. There have been credit tokens made from metal coins, metal plates, and celluloid, metal, fiber, paper, and now mostly plastic cards. First Bank Credit Card The inventor of the first bank issued credit card was John Biggins of the Flatbush National Bank of Brooklyn in New York. In 1946, Biggins invented the "Charge-It" program between bank customers and local merchants. Merchants could deposit sales slips into the bank and the bank billed the customer who used the card. Diners Club Credit Card In 1950, the Diners Club issued their credit card in the United States. The Diners Club credit card was invented by Diners' Club founder Frank McNamara and it was intended to pay restaurant bills. A customer could eat without cash at any restaurant that would accept Diners' Club credit cards. Diners' Club would pay the restaurant and the credit card holder would repay Diners' Club. The Diners Club card was at first technically a charge card rather than a credit card since the customer had to repay the entire amount when billed by Diners Club.

American Express issued their first credit card in 1958. Bank of America issued the BankAmericard (now Visa) bank credit card later in 1958. The Popularity of Credit Cards Credit cards were first promoted to traveling salesmen (more common in that era) for use on the road. By the early 1960s, more companies offered credit cards, advertising them as a time-saving device rather than a form of credit. American Express and MasterCard became huge successes overnight. By the mid-'70s, the U.S. Congress begin regulating the credit card industry by banning such practices as the mass mailing of active credit cards to those who had not requested them. However, not all regulations have been as consumer friendly. In 1996, the U.S. Supreme Court in Smiley vs. Citibank lifted restrictions on the amount of late penalty fees a credit card company could charge. Deregulation has also allowed very high interest rates to be charged.

The History of Visa Card | GOBankingRates The History of Visa Card By josev January 8, 2009 The program that was the precursor to what came to be known as Visa Card started 1958, when Bank of America began its own credit card program called the “BankAmericard.” BankAmericard was originally conceived as a program that would only be used statewide in California, as a way to efficiently process small bills that were originally being paid by check. But in 1965, Bank of America began to license the system to other banks and by 1976 it was a global program that was offered by banks all over the world. In 1970, Bank of America relinquished direct control of BankAmericard to the various financial institutions that were part of the collective, creating a joint economic that was a separate entity. National BankAmericard, or NBI, controlled domestic operations while international licensing was handled by a separate branch called IBANCO.

Origins of the Visa Card In 1976, IBANCO decided that the various licensed offerings of BankAmericard – including Barclaycard (in the UK), Carte Bleue (in France) and Chargex (in Canada) should be branded under a single name. Since many foreign countries resisted the “Bank of America” name, they chose “Visa” as a universally accepted brand which would be easily understood across Europe. The new name and logo with a blue, white, and gold flag are still on the credit card today. How Credit Cards Were Developed When credit cards were first introduced, they were issued by merchants and had a pretty standard set of features. These days, the range of credit card deals you can get is staggering. With all the different interest rates, reward programs, and fees available to you, it’s important to understand the difference and know what kind of card will suit your financial situation and your lifestyle. As far back as the late 1800s, merchants extended lines of credit to their customers using cards or special “credit coins” as currency. These credit cards were a private arrangement between the business and the customer, and were only accepted at the business that issued the card.

The credit was a way of developing customer loyalty and giving better customer service. It wasn’t until about the mid fifties that banks began issuing their own charge cards and “plastic” became a method of payment for most American consumers. Share This Article Online Banking and the credit card from the best bank by Mack S Peter - issuu issuu Issuu on Google+ Online Banking and the credit card from the best bank Bank Americard is the new credit card from Bank of America that is accessible with your BoA Online Banking account. This is the original name of the consumer line of credit that had become known as Visa. The Bank of America has now reintroduced it as the name of their credit card line once again, but that does not mean all Visa credit cards are going to be issued by BoA. This reissuing of the brand name in the financial world is an attempt to break away from the image of greed that this and many other financial institutions have earned since the last financial meltdown in 2008. The caps on the amount of rewards you can save have been removed along with a better rewards package on average for all credit card holders.

For those consumers that are investing their money in other Bank of America accounts, there are additional rewards programs being offered when you spend money on your credit cards that are issued by BoA. Just like many other of the online banks, Bank of America is doing what it can to change its image and bring back its hay day of being the first consumer line of credit like it was back in the late 1950â&#x20AC;&#x2122;s when the first BankAmericards were being issued. What is now available to loyal Bank of America account holders is the possibility of earning 1.5 points on purchase for every $1 they spend on their cards and have on deposit with BoA. If this is a good deal for the American consumer that is still an unknown. While the BankAmericard is the new credit card from Bank of America, the bank rates are relatively unchanged so their profits are still growing. It is the old advertising campaign of introducing nostalgia to regain lost trust. We strive to bring you the latest and most accurate data possible from the home sites of the financial institutions we name. Always remember, the bigger the risk, the larger the reward or loss. Invest with caution.

For additional resources involving financial help, please view PNC Online Banking, best bank savings rates,Bank Rates,Westpac Online Banking and Online Banks at All pages: Online Banking and the credit card from the best bank Mack S Peter Follow publisher Unfollow publisher Be the first to know about new publications. The History of Plastic Money | Cashco Financial The History of Plastic Money Home » The History of Plastic Money 1900-1950’s The Beginnings With a history of “plastic money”, you cannot ignore charge cards. Charge cards laid the groundwork for debit and credit cards. Company-issued charge cards can be found as far back as the early 1900’s. These cards mainly just kept customers loyal to the company. Charg-it “Charg-it” was the first actual bank card and was issued in 1946. The card was invented by a banker in Brooklyn, by the name of John Biggins. However, only local purchases could be made. The Diners Club Card The concept of the credit card was initially acted upon by Frank Mcnamara. After dinner with a fellow business associate, Frank found himself short on cash after forgetting his wallet.

What followed was an epiphany that led him to think of a charge card. This card, later known as the “Diners Club Card”, could be used at multiple locations. This novel idea became the first true model of the multipurpose charge card. American Express American Express issued their first credit card in 1958. Due to their international presence, the Green Charge Card was globally accepted. This became the first internationally available credit card. BankAmericard In 1958 Bank of America introduced a unique card that could be used to purchase anything at participating merchants. In other words, it was a universal card so the cardholder did not need multiple cards for specific destinations. This card also set industry standards such as 25-day grace periods, credit limits, and floor limits. The pilot program in 1959 initially had 60,000 customers and was a huge success. The program was then rolled out state wide in California. 1960s The Mag Stripe Credit and debit cards would not be what they are today without the Mag Stripe. This momentous leap in card technology arrived when the CIA hired IBM to attach a magnetic stripe to their identity cards.

The technology was already available; however, the main problem was permanently attaching the stripe to the card without wrinkles. While working on this problem, Forest Perry came home from work to find his wife ironing his clothes. When he mentioned the problem about the stripe, Forest’s wife asked to see the prototype card. Using the iron, she managed to melt the stripe to the card wrinkle-free. This solved the entire problem, which allowed IBM to go into full production with the Mag Stripe on all their cards. Automated Teller Machine (ATM) One of the most convenient aspects of plastic money is the all-serving ATM. The ATM (Automated Teller Machine) was brought into existence in the 1960’s by John Shepperd-Barron. After an unfortunate and unsuccessful trip to the bank, John had to wait until the next day when it opened again. That night, while reportedly taking a bath, John thought of a self dispensing cash machine. Along with the invention of what was soon to be the ATM, he also invented the 4-digit international standard pin code. John first wanted a six-digit army serial; but his wife convinced him four digits would be easier to remember.

The Chicago Debacle In the 1960s, unsolicited credit cards became a big problem for the Chicago market. The Chicago market was untapped by credit card companies by the mid-60s, so several companies began mailing “pre-approved cards”. This mailing tactic proved to be nearly fatal for those credit card companies, because they were accidentally mailing them to convicted felons, toddlers and even dogs. Organized crime rings even took advantage by using corrupt workers to intercept cards. Since these intercepted cards were already pre-approved, the people residing at the mailing address were billed thousands of dollars without even knowing about the stolen cards. 1970s – 1990s VISA Originally the Visa card started as the BankAmericard program and was never intended to go national, or international for that matter. In 1965 BankAmerica begin a licensing program with banks around California. After enough banks subscribed to the program, BankAmerica was able to create a joint venture bank association. This eventually rolled out on an international scale and BankAmerica changed the name of their card to VISA International. They also created a domestic America version named VISA U.S.A.

This two card system allowed VISA International to be more easily accepted across other countries due to having no association with America. The acronym VISA stands for Visa International Service Association; BankAmerica felt the name change was appropriate since VISA would be instantly recognized in many different languages. Their success continued and eventually they joined the Plus ATM network becoming even more accessible to customers around the world. These strategic branding choices allowed VISA to become one of the most recognizable and successful consumer brands today. Mastercard While the BankAmericard was gaining precedent around California, in Kentucky their competition was also gaining strong ground. Crocker National Bank, Wells Fargo, and Bank of California came together and launched the Interbank Card Association (ICA) in 1966. Three years later, Mastercharge changed their logo and came out with the iconic red and orange overlapping circle. However, it was not until ten years later when Mastercharge became the Mastercard we know today. The 80s were also a revolutionary decade for MasterCard. They released their emergency card replacement program; they entered the Pacific Rim, and acquired Cirrus which was the largest ATM network in the world.

After such a successful decade, MasterCard capitalized on their advancements and became the other key player in the market along with VISA. Discover Card The Discover Card was a revolutionary card in the 1980s. It specifically presented Sears and Roebuck & Co. customers with a new credit card option. This card was the first of its kind to have no annual fee, cash back, and high credit limits. The only problem was that since it was associated with Sears, other retailers where weary of accepting it, as they would be helping their competition. Eventually Discover realized that their brand needed to completely separate from Sears and so they proceeded to do so. Separating from Sears made Discover more attractive for other merchants to adopt the card. By the early 1990s, Discover became incredibly successful and was a regarded as a competitor of merit to Visa and MasterCard. 1990s – Today To adapt to an ever-evolving technological world, credit and debit cards have become more efficient and instantly accessible across multiple mediums. With new technologies such as mobile platforms, this presents numerous opportunities for vendors and consumers alike. Chip and Pin One of the more disruptive changes to plastic money came with the adoption of chip and pin technology.

This system has become a standard with credit and debit cards, and is preferred to the magnetic stripe. Chip and Pin technology makes cards much more secure and personal information is very hard to steal because of the encrypted chip. A cloned chip can also be immediately recognizable as a fraudulent card, as each individual chip is specifically encrypted for each individual card. Even though this card technology has been around since the 1990’s, it has become nationally used across Canada, and will become mandatory in the United States by October, 1st 2015. Square Being able to accept transactions through a mobile device is a game changer for businesses. This was largely made possible by a company called Square. Square allowed a cell phone to be used as a point of sale system and accept card payments anywhere. The device simply plugs into the headphone jack and has a card slot for the customer to swipe their card. Introduced to the market with a 2.75% flat rate fee, mobile card readers have definitely a significant contribution to plastic money. Square has opened the door for many small businesses across the world that can now offer their consumers more ways to pay. Bling Tag The Bling Tag makes it even faster to pay via mobile device.

It is a sticker that contains an NFC (Near Field Communication) chip. The NFC chip uses the same technology that is in your traditional credit or debit card. Any Bling Tag user simply has to tap their phone on the card accepter machine just like tapping a credit or debit card. This is convenience at an entirely new level. Consumers can leave their wallets or purses at home. YesCard The YesCard is a new way of accessing online loans and getting money instantly. The old ways of taking loans in the form of a cheque or cash, having to wait days for processing and then taking the time to deposit the money are gone! The YesCard allows you to access and use your loans any time any place and faster than anywhere else. Conclusion We hope that you enjoyed our overview of plastic money over the last century. Taking advantage of these new technologies could prove to be the first step in securing a company’s competitive edge. We’d love to hear your stories about how these technologies have impacted your lives. Sean Sean is enthusiastic about the newest technology. Main interests are video games and he can usually be found playing them any chance he gets. If not gaming, he is out and about having random adventures and testing out the latest gadgets.

He is always one to have a joke and a smile up his sleeve. Popular Posts

Question: First issued by Bank of America in 1958, the BankAmericard is now known by what name?
Answer: Visa